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The Department of Business, Economic Development and Tourism is expecting Hawaii’s economy to slow more in 2009 than previously forecast, but a turnaround is expected in 2010.

The department said in its latest quarterly economic report released Friday that it expects a 0.2 percent decline in the state’s 2009 gross domestic product and the total wage and salary job count is expected to decline 1.3 percent.

Tourism will likely be impacted more than previously expected. Arrivals are expected to decline 5.9 percent for the year, down from the 1.9 percent projected in the previous forecast, DBEDT said.

“National and international economic conditions continue to slow Hawaii’s economy and this will likely be the case for most of 2009,” said DBEDT Director Ted Liu, in a statement. “We are hopeful of a turnaround beginning late this year, but recovery is likely to be a gradual process. The American Recovery and Reinvestment Act of 2009 will also have a positive impact beginning in the latter half of the year and will allow the state to make investments in some transformational changes especially in the area of energy no fax payday loans.”

Personal income growth has been lowered to 0.8 percent for 2009, but lower inflation will limit the decline in real personal income to the previously forecasted 0.4 percent, DBEDT said.

The economy will be better in 2010, however, as DBEDT said it expects it to stabilize with a modest 1.3 percent growth in visitor arrivals and slight increases in real personal income and real GDP.

The net job count, however, will likely remain flat in 2010, DBEDT said. Inflation will remain low with a 1.5 percent increase.

DBEDT said it expects modest growth in Hawaii’s economy in 2011, with a 4.6 percent increase in visitor arrivals and spending up 7.2 percent. Real personal income is expected to increase 1 percent and real GDP by 1.6 percent in 2011. The state’s job count could see a 0.5 percent increase.

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Benjamin Netanyahu plans to apply the same small-government policies when he becomes Israel’s prime minister as he did six years ago as finance minister. Then, his tax and spending cuts helped lift the economy out of recession. They may be less suitable this time around.

The Likud party leader, who has until April 3 to form a coalition, faces a shrinking economy, a growing budget deficit and a frozen corporate bond market. The recession in the U.S. and Europe has clobbered Israeli exports, which account for about half of gross domestic product in a country whose economy is smaller than Singapore’s. His only fiscal tool for the moment is a budget drawn up in August and stalled in the parliament.

“Israel must take steps in the same spirit as the U.S. and Europe, to allow an even bigger deficit” than is already being created by falling tax revenue, said Avi Ben Bassat, a professor of economics at the Hebrew University in Jerusalem. “The situation requires a change in economic policy.”

Netanyahu’s plans for the economy may encounter objections from his future partners. Although assembling his coalition could take several weeks, one probable member, the Shas party, said during the election campaign that it would seek to restore child allowances that had been reduced under Netanyahu.

Losing Jobs

Israeli GDP fell at a 0.5 percent annualized rate in the final quarter of 2008. The Bank of Israel, whose index of leading indicators posted its steepest drop in January since records began in 1975, forecasts a 0.8 percent decline in GDP this year. The government’s Export Institute forecast today that exports of goods and services will drop 17 percent this year to about $65 billion.

Israel’s state Employment Service says a record 19,700 people lost their jobs in January. The Tel Aviv Stock Exchange’s benchmark TA-25 Index is down 47 percent from its peak on October 2007 and was down 0.5 percent today at 9:55 a.m. local time.

“There will be a certain amount of deterioration before we can turn around the economy’s direction,” Netanyahu said Feb. 23 at a meeting of Likud lawmakers. “We face an economic crisis that we haven’t seen in many years.”

Netanyahu, 59, has vowed to lower Israeli taxes as he did as finance minister. He also promised during the campaign to liberalize the real-estate market, saying the Israel Land Administration’s near-monopoly inflates housing costs.

To solve the credit crunch, he says Israel should use existing U.S. loan guarantees to extend credit to companies, and proposes spending an unspecified amount of money on building roads and rails.

Industrial Policy?

Gidi Grinstein, president of the Tel Aviv-based Reut Institute policy group, said that won’t be enough. He proposes the government undertake an “industrial policy” aimed at opening markets in China and India and developing new technologies.

“The paradox of Netanyahu is that he has set very ambitious growth objectives for the Israeli economy, but the steps he has proposed won’t bring about the kind of growth he is talking about,” Grinstein said by telephone.

Ben Bassat said Netanyahu should focus on reducing Israel’s debt, which is now about 78 percent of GDP, higher than the average for developed countries, rather than lowering taxes online payday advance. Israel must not let its deficit reach the same level as in the U.S. because it has high defense costs and because it faces a continual threat of war, he said.

State Control

Almost since its creation in 1948, Israel’s economy has been dominated by government. Officials decided everything from the exchange rate to whether companies could raise capital. The government and labor unions controlled such big companies as Koor Industries Ltd. and Israel Chemicals Ltd.

While liberalization began in the 1980s, it stalled in the following decade — including during Netanyahu’s first tenure as prime minister from 1996 to 1999 — as the country’s technology industry and the Palestinian peace process boosted growth.

By the time Netanyahu left the Finance Ministry in 2005 to protest the government’s withdrawal from the Gaza Strip, he had sold or begun selling El Al Israeli Airlines Ltd., the biggest carrier; Bezeq Ltd., the biggest telecommunications provider; and Israel Discount Bank Ltd., the third-largest lender.

“It’s very important to create an internal engine by reining in the size of government, cutting taxes and the bureaucracy,” said Ohad Marani, who served as the top aide during Netanyahu’s first year as finance minister. “He’s very much for small government.”

‘Very Decisive’

By cutting spending, Netanyahu helped reduce Israel’s budget deficit to 1.8 percent of GDP in 2005 from 5.1 percent in 2003. The TA-25 plunged 5.2 percent the day he announced he was stepping down. The deficit may reach 5 percent of GDP this year, Ben Bassat estimates.

“He was very decisive,” said Yossi Bachar, who replaced Marani. “He resisted all the pressures on him, even if it cost him politically.”

Thanks in part to Netanyahu’s actions as finance minister, his government will have fewer challenges than those in the U.S. and Europe, said London-based Senior Economist Reinhard Cluse of UBS AG.

“Israel has a tough business cycle outlook, but no more than that,” Cluse said by telephone, adding that the government must take “expansionary” fiscal measures soon or risk seeing the slump extend into 2010.

Biggest Challenge

One of the biggest challenges Netanyahu faces is the crisis in Israel’s corporate bond market, said Leo Leiderman, chief economist at Bank Hapoalim Ltd. in Tel Aviv.

The Tel Bond 20 index of the biggest corporate bonds fell as much as 19 percent in the last quarter as pension funds and other institutions were forced to sell securities to meet cash calls from investors. About 20 billion shekels ($4.7 billion) in non-bank debt comes due this year, the Bank of Israel estimates.

“The question is how the corporate sector will meet its obligations to bondholders and banks,” Leiderman said by telephone. “The economy is small enough that two or three significant players getting into trouble could paralyze the whole system.”

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Roughly 97% of American households could see tax savings as a result of the American Recovery and Reinvestment Act, according to a new analysis by a nonpartisan research group.

The Tax Policy Center crunched the numbers and concluded that the average savings would be $1,179. But how much a household actually gets depends on income, marital status and whether a filer has children. The savings range from a few hundred dollars to several thousand.

The law, which President Obama signed on Tuesday, contains a range of tax breaks for individuals. Those likely to affect the greatest number of households are the new Making Work Pay credit worth up to $400 ($800 for joint filers); a patch to protect middle- and upper-middle-income families from having to pay the Alternative Minimum Tax; and expansions of the earned income tax credit and the child tax credit for low-income families.

There are also breaks that address specific situations: a new credit for first-time home buyers, a sales tax deduction for car buyers and a new credit to help pay for college tuition. For people receiving unemployment benefits, the first $2,400 will be tax free.

On Saturday, Obama said the government had already taken action on the broadest of the law’s cuts — the Making Work Pay.

The Treasury Department has told employers to reduce the amount of taxes withheld from paychecks by April 1. Treasury estimates that a typical family will begin taking home about $65 more per month, according to Obama.

"Never before in our history has a tax cut taken effect faster or gone to so many hardworking Americans," Obama said in his weekly video and radio address.

In addition, the economic recovery plan contains a host of tax breaks for small businesses.

The Tax Policy Center used a representative sampling of all tax filers and non-filers, including information on their income, their spending and their demographics. And then they applied the various tax provisions for which those in the sample pool qualify cheapest personal loan rates.

Some tax-saving scenarios

A single person with no children making between $20,000 and $30,000 would see a 12.5% reduction in his or her tax liability for an annual savings of $453. The same person making between $50,000 and $75,000 would see a 4.6% drop, or $626.

At the upper income ranges, someone with income between $100,000 and $200,000 would see a 2.1% drop, which translates into $706.

With or without kids, a married couple filing jointly making between $50,000 and $75,000 could see a 10.5% drop for a savings of $991. Those making between $75,000 and $100,000 would see their tax liability go down 9.1%, or $1,457.

Couples with very high incomes — between $200,000 to $500,000 — could see a 7.5% decline in their tax bill, or $5,645.

Households with children, regardless of the parent’s marital status, would see savings on their tax bill averaging 9.7% of their tax liability, or $1,975.

When you’ll see savings

The first tax credit filers will enjoy is the Making Work Pay credit, which will show up in increments in people’s paychecks starting in April.

In some instances, such as with the first time home buyer’s tax credit, the money can be claimed on one’s 2008 tax return if the home purchase occurs between Jan. 1 and before Nov. 30 of this year.

But in many cases, a household won’t see some of their stimulus savings until they file their 2009 returns, which they can’t do until 2010.

Of course what filers’ save on their federal taxes under stimulus may be muted by the fact that their cities and states — facing steep budget shortfalls that will be lessened but not eliminated by stimulus funding — may end up raising taxes and fees. 

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Lowe’s Co. reported a sharp drop in quarterly profit Friday as it marked down prices in the recession and it gave profit forecasts that fell short of Wall Street estimates, sending shares down 3%.

The second-largest home improvement retailer also cut its planned store openings for 2009.

"The stimulus efforts will provide some support to the consumer, but today the macro environment shows few positive signs and therefore we continue to plan conservatively," Lowe’s Chairman Robert Niblock said during a conference call.

Earnings fell 60% to $162 million, or 11 cents a share, for the fourth quarter ended Jan. 30, compared with $408 million, or 28 cents a share, a year earlier.

Analysts expected profit of 12 cents a share, according to Reuters Estimates.

Sales fell 3.8% to $9.98 billion. Sales at stores open at least a year fell 9.9%.

Gross margin contracted to 33.7% from 34.9% a year earlier, hurt by the price cuts on seasonal merchandise. Lowe’s expects pressure on gross margin to ease during the first quarter, but still expects margin to be down for that period.

"We think the report reflects the challenge Lowe’s faces in continuing to reduce inventory and expenses in line with its third year of declining sales," Sanford Bernstein analyst Colin McGranahan said in a research note no teletrack payday loan lenders.

He added that "the company’s already lean operating structure will likely limit the extent of expense reductions possible, thereby continuing to put pressure on operating margins."

Fewer new stores

Lowe’s and industry leader Home Depot Inc (HD, Fortune 500) have curbed store expansions as the U.S. housing slump and tight credit markets curtailed demand for big-ticket home improvement projects.

On Friday, Lowe’s said it now plans to open 60 to 70 total stores this year, down from 75 to 85 stores it originally forecast.

The fourth quarter marked the sixth-straight quarterly profit fall for Lowe’s, and Home Depot is expected to report its 10th-consecutive decline in quarterly earnings on Tuesday.

Lowe’s forecast profit of 23 cents to 27 cents a share for the first quarter and $1.04 to $1.20 a share for the full year. Analysts expected profit of 32 cents for the first quarter and $1.27 for the full year.

Lowe’s shares were down 63 cents, or 3.7%, to $16.35 in morning New York Stock Exchange trading, while Home Depot was down 24 cents, or 1.2%, to $19.92. 

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The U.S. government will release $4 billion in additional aid to General Motors Corp on Tuesday as planned, a White House aide said on Monday, ahead of the deadline for the automaker to submit a new survival plan.

The aide said GM’s smaller rival Chrysler LLC’s request for additional aid would be treated as a new request and dealt with separately.

GM is seeking concessions from the United Auto Workers union and creditors under the terms of its $13.4 billion federal bailout. It must submit a restructuring plan to U.S. officials on Tuesday showing how it can cut costs and pay back the loans.

President Barack Obama has decided to launch a government task force for restructuring the U.S. auto industry instead of naming a “car czar” with sweeping powers.

He is appointing Treasury Secretary Timothy Geithner as his “designee” for overseeing auto bailout loans and as co-head of the new high-level panel together with White House economic adviser Lawrence Summers, a senior administration official said on Sunday quickpayday loan.

To date, GM has received $9.4 billion in federal aid that has allowed it to stay in operation since the start of the year. It is widely expected to seek additional assistance with the restructuring plan due Tuesday.

Chrysler, controlled by Cerberus Capital Management, has been granted $4 billion in federal and is seeking an additional $3 billion.

(Reporting by Jeff Mason; editing by Todd Eastham)

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A passenger fee is going up 25 per cent at Toronto Pearson International Airport as Canada’s largest air transport hub reacts to a reduction in the number of travellers.

The Greater Toronto Airports Authority, or GTAA, Pearson’s not-for-profit manager, said yesterday its airport improvement fee will increase on June 1 to $25 per departing passenger from $20.

The authority also announced an immediate hiring freeze on its 1,200-person workforce. There also is a freeze on management salaries, and some facilities such as lightly used gates at Terminal 3 will be closed. All but critical capital projects have been postponed.

The moves are being made "in light of the current economic climate which has resulted in projections for a downturn in passenger traffic," the GTAA stated.

"Transport Canada’s passenger volume forecasts are now anticipating a 5.8 per cent reduction, which translates to roughly 1.8 million fewer trips through Toronto Pearson this year payday loan lender."

In an effort to attract traffic, Pearson is offering airlines landing-fee rebates of up to 50 per cent for new flights into and out of the airport.

The authority noted its room for cost-cutting is restricted as two-thirds of its expenses are fixed, including rent paid to the federal government, debt servicing costs and payments in lieu of taxes.

"Despite this challenge, many cost reductions have been highlighted for 2009 and more must be done."

Deferred projects include a Terminal 1 parking expansion, Terminal 2 garage demolition and planning for a new Pier G gate complex.

The fee hike is needed "to increase revenue to compensate for the downturn in passenger traffic," GTAA spokesperson Scott Armstrong said

The Canadian Press

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The London Stock Exchange has appointed Xavier Rolet as its new chief executive, putting the equities trading veteran at its helm at a time when it faces increasingly fierce competition.

Rolet, the former head of Lehman Brothers in France, will take over as chief executive on May 20, the LSE said on Friday, taking over from Clara Furse, the first woman to lead the centuries-old stock exchange.

Rolet worked with the LSE during a nine-year career at Lehman Brothers, the London bourse’s biggest client before the U.S. investment bank’s collapse in September last year, and he previously held senior roles in the equities divisions of Dresdner Kleinwort, Credit Suisse, and Goldman Sachs.

The news confirmed a Reuters story from February 5, which said Rolet was the frontrunner to succeed Furse.

“(The LSE’s) strategic position is unique, and its business prospects are excellent,” Rolet said in a statement.

The LSE faces increasing competition from new trading platforms such as Turquoise and Chi-X and has been forced to cut its prices as a consequence.

Analysts say the LSE is under pressure to broaden its revenues and make it less dependent on its cash equities business guaranteed online payday loans.

They are also keen to see whether the bourse will pursue its standalone policy, for which Furse was criticized when the LSE’s shares started losing value, but some said Friday’s statement indicated no speedy changes.

“Furse successfully defended the LSE from takeover and that is not going to change,” Oriel Securities said in a note.

LSE shares rose 4.6 percent to 491.75 pence by 3:53 a.m. EST, in a broadly higher market.

During her eight years as chief executive, Furse rejected takeover bids from Deutsche Boerse and Nasdaq and acquired Milan-based rival Borsa Italiana.

LSE shares, which peaked at over 1,700 pence a year ago, have fallen sharply amid concerns that the financial market downturn will curb equity trading volumes.

Furse will remain as a director until July this year.

(Writing by Douwe Miedema, Reporting by Myles Neligan; Editing by Greg Mahlich)

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Whirlpool Corp., the world’s biggest appliance maker, reported lower quarterly profit Monday as sales fell worldwide, and it posted an operating loss in North America, its biggest market.

The company, which has cut thousands of jobs in the past year, said it was taking additional moves to reduce costs, and it forecast lower earnings for 2009.

Fourth-quarter profit fell 76% to $44 million, or 60 cents a diluted share, from $187 million, or $2.38 a share, a year earlier.

Analysts on average expected profit of 78 cents a share. Whirlpool cited restructuring charges and other one-time items, and it was not immediately clear whether the Wall Street outlook compared directly with the result, Reuters Estimates said.

Quarterly sales fell 19% to $4.3 billion.

In North America, sales fell 18% to $2.5 billion as industrywide shipments of appliances dropped about 10%. Whirlpool said it expected U.S. industry shipments, an important gauge of sales, to fall about 10% this year.

The North American unit had an operating loss of $20 million, against a year-earlier profit of $175 million, hurt by the lower sales, product recall costs and higher material and oil expenses payday loan lenders.

Fourth-quarter sales fell 16% in Europe, 26% in Latin America and 10% in Asia.

The company, whose debt ratings have been downgraded recently, said it had tapped into a $2.2 billion credit facility during the fourth quarter and was in full compliance with bank covenants. But it added that it had begun talks with banks to "seek additional flexibility within its capital structure."

Whirlpool (WHR, Fortune 500) said it expected 2009 profit of $3 to $4 a share from continuing operations, down from $5.50 for 2008.

Analysts have forecast profit of $4.07 a share for this year, according to Reuters Estimates.

Talkback: Is the economy giving you wedding jitters? Are you cutting back on your big-day plans or are you still going all out? Email realstories@cnnmoney.com and you could be included in an upcoming article. 

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Lee Enterprises Inc., publisher of the St. Louis Post-Dispatch, said Friday it received another waiver extension on loan requirements related to the $306 million in debt it took on when it bought the Post-Dispatch in 2005.

The waiver has been extended until Feb. 13, “while financing discussions continue,” Lee said in a statement guaranteed approval cash loans. The Pulitzer notes are due in April.

Davenport, Iowa-based Lee (NYSE: LEE) borrowed $1.5 billion to buy Pulitzer in 2005.

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BHP Billiton, the world’s biggest miner, braced for a very uncertain future as it reported a 2.2 percent increase in first-half profits, aided by a last burst of Chinese demand growth.

BHP’s earnings are set to fall this year for the first time in a decade as oil and metals prices have slumped and demand for metals has dwindled as manufacturers slash production worldwide.

In face of the downturn, the company already flagged it would shed 6 percent of its workforce and shut its Ravensthorpe nickel operation, with a $3.3 billion (2.29 billion pound) writedown on the project. It has warned it may have to close more mines.

“Momentum and risk in our view is still probably to the downside,” CEO Marius Kloppers told analysts. “The turning point for any eventual recovery continues to be pushed out.”

Analysts said BHP’s underlying earnings were largely in line with expectations, but net profit appeared to have been hurt by a bigger tax cost than expected. They tipped the sharp slide in the December quarter was likely to continue in the second half.

“The momentum of the commodities market is negative and BHP still sees a very tough and volatile market in the next six months. Clearly they won’t be able to repeat the types of numbers seen in the first half,” said Tim Schroeders, a portfolio manager at Pengana Capital.

Despite the tough times, BHP still has a strong balance sheet, using its strong cash flows to cut net debt to $4.2 billion — about a tenth of the net debt weighing down rival Rio Tinto cashadvance.

“You can’t argue with the balance sheet. They’re probably positioning themselves to take advantage of some asset sales as they arise,” said Michael Bentley, a portfolio manager at Northward Capital.

Rivals like Rio and Oz Minerals are desperate to sell assets to pay down debt.

“However being in this strong position does not mean immunity from the strong winds that are blowing,” said Kloppers, adding the company would continue to trim production if necessary.

Asked if BHP might resume a share buyback, which was put on hold when the miner launched a huge hostile bid for Rio Tinto in 2007, Kloppers said now was not the time, given the uncertain outlook.

Reflecting the cloudy outlook, BHP matched Rio in reneging on a policy of steady dividend increases, holding its payout steady against the June half. However, that was up 41 percent on a year ago.

The company said commodity prices were likely to remain weak and volatile for some time.

“Compared to how upbeat BHP was four to five months ago, this is a much more subdued outlook,” said Peter Chilton, an analyst at Constellation Capital Management.

July-December profit before one-offs rose to $6.13 billion from $5.995 billion a year earlier, missing analysts’ forecasts for $6.78 billion. 

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